To our valued clients,
Families First Coronavirus Response Act Update
As of the early afternoon of 3/19/2020, the Senate is currently in process of working on “Phase 3” of the Families First Coronavirus Response Act (FFCRA). Last night the president did sign HR 6201 which is “Phase 2” in what is expected to be a series of bills that aim to stimulate economic activity and strengthen the country’s response to, and recovery from, the COVID-19 pandemic. Please note, the bill only applies to employers with fewer than 500 employees. The bill does give the Secretary of Labor the authority to exempt small businesses with fewer then 50 employees from the bill’s paid leave requirements if those requirements would jeopardize the viability of the business. There are three key provisions of Phase 2.
1 – Emergency Paid Sick Leave.
Through December 31, 2020, the Act requires employers with fewer than 500 employees to provide all employees with 80 hours (e.g, 10 business days) of emergency paid sick leave for full-time workers (pro-rated for part-time employees or employees with varying work schedules) for employees who are unable to work or telework for specific coronavirus-related reasons noted in the attached file. Generally, employers would pay employees at their regular rate of pay for emergency sick leave, capped at $511 per day ($5,110 in the aggregate) if the leave is taken for an employee’s own illness or quarantine. Employers would pay employees two-thirds of their regular rate of pay for emergency sick leave, capped at $200 per day ($2,000 in the aggregate) if the leave is taken to care for others or due to school closures.
2 -FMLA Amendments
FMLA Mandates - Paid Job-Protected Leave Under the Family and Medical Leave Act
The bill provides employees of employers with fewer than 500 employees with the right to take up to 12 weeks of job-protected leave under the Family and Medical Leave Act “FMLA”. The first two weeks of leave may be unpaid. After the first two weeks, employers must continue paid FMLA leave at an amount not less than two-thirds of an employee’s regular rate of pay up to $200 per day or $10,000 in the aggregate. Adjustments would be made to the amount of paid time off for employees with varying schedules. An employee is eligible if the employee is unable to work or telework due to having to care for a child under age 18 if the child’s school or place of child care has been closed (or the child care provider is unavailable), due to the COVID-19 public health emergency.
3 - Payroll Tax Credits
To assist employers who are required to provide emergency paid sick leave or FMLA leave under the programs described above, the Act provides for a refundable tax credit applicable against the employer’s portion of Social Security or Railroad Retirement Tax Act (RRTA) tax for amounts paid under those programs. The credit is equal 100 percent of qualified family leave wages required to be paid by the Emergency Family and Medical Leave Expansion Act and qualified paid sick leave wages required to be paid by the Emergency Paid Sick Leave Act that are paid by an employer for each calendar quarter.
Credit Amount for Public Health Emergency Leave Wages. The amount of qualified public health leave wages taken into account for each employee is capped at $200 per day and $10,000 for all calendar quarters.
Credit Amount for Sick Leave Wages. In instances when an employee receives paid sick leave because they are subject to a quarantine or isolation order, have been advised by a health care provider to self-quarantine, or are experiencing coronavirus symptoms and seeking medical diagnosis, the amount of qualified sick leave wages taken into account for each employee is capped at $511 per day.
Please see the attached document for more detailed information on the provisions.
FOR OUR CLIENTS WITH PAYROLL
If we assist you with your payroll, we will not be suggesting any changes to your tax liabilities currently, as there are no clear instructions on how, or if, the government plans to provide these credits for employers. We are anticipating further clarification and explanation on how the IRS plans to handle these new acts.
At this time, the state of Alabama does not have any act in place to address the mandatory use of sick leave/PTO. This is a hot topic for quite a few clients at this moment. The Emergency Aid bill was passed, meaning sick leave/PTO can be used, but cannot be made mandatory. The state of Alabama and state of Georgia released information this week in regards to filing unemployment. These links are included below, please note in Georgia, you, the employer must file on behalf of the client.
Alabama Department of Labor
Georgia Department of Labor
Some questions you may have may be more related to HR/Employment Law, however, we will attempt to answer questions to the best of our ability. Changes are frequently happening each day in regards to this and we will strive to keep you up to date, should anything effecting your business occur. We do have employment attorneys that we can refer you to, should you have additional questions. To stay updated on the Coronavirus and view resources and tips from the government, click here. You may also contact Wage & Hour and Benefits with any questions at 334-223-7450 or 1-866-487-9243.
FOR THE SAFETY OF OUR CLIENTS AND STAFF
To do our part in “social distancing”, our black locked drop-box located beside the front door is available for you to use for small items of tax information that we have requested from you, to return signed e-file forms, or to drop off payments. We have a box in the lobby for you to use to drop off larger tax packages/organizers or information. We also have a secure file sharing application called SecuriSync, which can be accessed directly from our website once we have created an account for you. If you would like to set up an account, please contact Mary Beth Litsey at mlitsey@machenmcchesney.com. As always, we will update you immediately with details. If you have any questions or further concerns, please do not hesitate to contact our office at (334) 887-7022.
Best Regards,
Martin D. Williams, CPA,
Managing Partner
Machen McChesney, LLP
